Jobs hit as New York dips into recession
Unemployment has soared in New York in the wake of the World Trade Centre attacks, it was announced today.
And experts predict it could take nine months for the city’s economy to recover from the impact of the fall of the twin towers.
A total of 75,000 jobs were lost as a direct result of the terror attacks, but overall, unemployment rose as tourist numbers plunged and shop sales fell.
The terror strikes have driven the once-booming district into recession, and may drive some firms out of Manhattan, giving city chiefs a long-term headache and threatening the future of the economy.
Columbia University Professor of Economics David Weinstein said: ‘‘The economic impact of the World Trade Centre is going to take a number of years for the city to overcome and the city will be buffeted by recession but as we go forward four quarters or more, we’re going to see growth.’’
The city has seen 5,000 hotel workers laid off as tourists numbers fell, leaving a two-thirds of all rooms empty in the week after the attack and a third still not being taken.
And although tourists are coming back, hotel bosses are worried about occupancy levels.
John Fox, of hotel consultants PKF Consulting, said more people were checking in, but not as many as last year and added: ‘‘It’s nowhere near the 95% we had last fall.’’
Also laid off were 15,000 restaurant workers, who suffered as New Yorkers stayed home and tourists stayed away, while 70 restaurants closed completely.
Kathy Wylde, head of the New York Partnership, a consortium of local business leaders, said: ‘‘Tourism is down 40% for this quarter and down 14% for the year.’’
The fall in visitors has hit prestigious stores including Saks Fifth Avenues and Macy’s.
Sales at Saks fell 31% in September, while Macy’s, which also owns Bloomingdales, another of the city’s famous department stores, saw cash registers bring in 12.9% less between September 11 and October 6 than in the same period last year.
But business chiefs are also concerned some firms will relocate out of New York to meet workers’ security fears.
Ms Wylde said: ‘‘This big concern is, will businesses, particularly in the financial service area, that have been dislocated by the attack come back, or will they get comfortable with suburban locations.’’
The fear has been fuelled by the fact that even though the World Trade Centre attacks destroyed 23 million square feet of office space, commercial rents went down last month.
The destruction should have sent prices soaring, but instead, estate agents saw prices fall and the amount of space available increase.
Some firms have already announced they are leaving New York, including the Wall Street Journal, which is relocating almost all its staff across the river to New Jersey.
And the city’s high-rollers are also tightening their belts when it comes to house buying at the trendiest addresses.
Pam Lieberman, president of the Corcoran Group, one of the city’s biggest estate agents, said: ‘‘The high end of the market, dollars 3 million and above, is getting hit hard, although properties bellow dollars 2 million are doing OK.
‘‘There’s definitely downwards pressure.’’
